New West families see rising debt due to rent and food prices – The Record (New Westminster) | Vette Leader

Family Services offers financial workshops and individual coaching to strengthen your finances

People of all ages use credit — or access payday loans — to pay their rent and put food on the table.

Murray Baker, manager of financial empowerment at Family Services of Greater Vancouver, said rising inflation and interest rates are affecting everyone, especially low-income and vulnerable people. He said it’s having a “huge impact” on people in Metro Vancouver because some of the areas seeing the biggest increases are groceries and rentals.

“It would be different if it were about luxury cars – that’s not going to affect the customers we see,” he said. “It’s the food and the rent that hit these people really hard.”

Baker said people who have lower incomes, have unstable employment, or are seniors or people with disabilities may access credit just to make ends meet.

“They don’t access credit to buy luxuries or necessities; They have to access credit just to make ends meet from day to day,” he said. “Putting food on the table, feeding their families, making sure they have money for rent at the end of the month.”

Baker said people who don’t have good credit ratings or have unstable employment may find it very difficult to get credit through banks or other financial institutions, so they’re often pushed to get credit through “predatory” lenders who Fees can charge 45 to 60 percent interest on loans.

“It’s one of the areas that we’re seeing an increasing number of people affected by,” he said. “And once people get caught up in this downward debt cycle, it’s really hard for them to get out of there.”

Baker said he’s dealing with some “heartbreaking” cases, like a fixed-income senior who accessed a loan to help a family member and then pays $1,000 a month to service those loans.

“If you access it, you have to pay. And if you miss payments, there are penalties. And interest rates are prohibitively high,” he said. “Honestly, I was concerned about his mental health because he was so stressed about it. Imagine a senior in their 70s who isn’t living the extravagant life and is suddenly struggling to…raise that money to pay off those loans.”

Family Services was able to help the man get a loan through a credit union, which reduced his payment to $350 a month.

“Some of the toughest ones I see are people who are struggling, seniors who may have worked their entire lives, haven’t lived a flamboyant lifestyle or anything, and are struggling with homelessness or food security,” he said. “So these are some of the most heartbreaking customer stories I’ve seen.”

Baker told the story of a disabled client who took out payday loans but didn’t fully understand what he was signing.

“He thought the interest he was paying was 6 percent, but it was 46 percent,” he said.

Some people, Baker said, feel like they have no choice but to get payday loans because they can’t get credit through a bank.

“They choose the predatory lender because the bank is actually closed to them. You do not have access to credit through the bank. So it’s a forced decision that’s pulling people there,” he said. “And then unfortunately, when the economy is tight, some of these places really thrive because people — it’s about whether I take out a payday loan or default on my rent or do I have an empty table for dinner?”

Financial Literacy Month

November is Financial Literacy Month in Canada, a month aimed at increasing financial literacy across the country. This year’s theme is Make Change that Counts: Manage your money in a changing world.

According to the Financial Consumer Agency of Canada, this year’s theme reflects a complex and changing financial landscape. In the context of higher living costs, rising interest rates and record levels of household debt in Canada, FCAC is putting a spotlight on debt management.

According to Family Services of Greater Vancouver, the number of people affected by inflation and rising costs of living continues to rise across the Lower Mainland: Nine in 10 Canadians are tightening their budgets as inflation and high prices persist; high inflation drove a record number of Canadians to Tafel in 2022; and nearly half of Canadians report worse off financially than they were a year ago.

Baker said financial empowerment is about providing individuals with education so they can make better, more informed financial decisions. When they have solid information about finance, they are able to make good decisions and ask the right questions.

“If you have basic knowledge and ask well-thought-out questions, you’re more likely to be less likely to be financially exploited,” he said.

Baker said he’s always been confused as to why students aren’t taught financial empowerment at school.

“A life skill, like financial empowerment, is something you’re going to use throughout your life,” he said.

When people have an understanding of budgeting, financial goal setting, and saving money, it can have a drastic impact on their lives, Baker said.

Help is available

Family Services offers general workshops on: Money Basics (financial skills, budgeting, credit and debt); Growing Your Money (Saving and Investing, Saving for Retirement, Registered Disability Savings Plans) and Registered Education Savings Plans); Money and You (Money and Relationships, Consumption, Fraud and Fraud); navigation advantages; and submit taxes. Services are offered in English, Spanish, French, Farsi, Cantonese, and Vietnamese, and some workshops are offered in public libraries across the region.

“The message we want to convey is that when people are struggling, there is help,” he said. “Of course our workshops are good for general information. But our one-on-one coaching is really helpful.”

While workshops and one-on-one coaching can’t immediately solve people’s financial problems in one session, Baker says they often leave an hour-long session less stressed than they arrived.

“They realize there are some options, but when they first come they think there’s no hope,” he said. “You leave knowing, ‘Hey, we talked about different strategies or things I can do.'”

Through one-on-one coaching, family service employees work with a person on their personal situation.

“Our approach is really a trauma-informed approach, client-centric,” Baker said. “We support and provide the information, strategy and options, but ultimately it’s up to the customer what action they want to take. We find that’s really beneficial because it gives them control and they gain that confidence because they know they’re making the decision.”

Baker said interest in the programs increased following the outbreak of the pandemic. It is also picked up as inflation has risen.

For people struggling financially, Family Services’ first step is to see if there are ways to increase their resources, which could include using the Benefits Wayfinder tool, which provides a list of potential benefits they may be able to receive .

“So often customers come to us not even realizing they’re missing out on a particular benefit,” Baker said. “One of the things we do is make sure their taxes are filed and up to date, which sometimes low-income people don’t file because their rationale is, ‘I’m not making enough money, it’s not worth filing .’ But if they don’t, they often miss out on many government benefits.”

Family Services also helps people learn about community benefits they may be entitled to, such as: Other actions could include finding ways to reduce costs and providing information about food banks and other nutrition programs where food insecurity is a concern.

Baker said single parents are one group who find it particularly difficult, as do seniors who may not be able to take a job or another job. He said college and university students are accessing grocery programs in increasing numbers after experiencing “very significant” increases in rents.

“Actually, it’s an area. I’ve spent most of my career in this field, writing books for students on how to fund college and university. So it’s an area I’ve been studying and writing in for many years. And it’s, you know, this is probably one of the worst situations in terms of current students.

Baker is the author of the book, The Debt Free Graduate: How to survive college or university without going broke. He was inspired to write the book after seeing the “enormous debt” students went into after graduation and the impact it had on their lives many years after they graduated from university, including their ability to get married, a Starting a family, starting their own, running their own business, buying consumer goods (which affects the entire economy) and putting money aside for their own financial future.

“It’s really having some wide-ranging implications,” he told the recording.

Debt impacts people’s lives — from their relationships with family members to mental health issues, Baker said. He emphasizes that there is no shame in seeking help.

“People don’t need to feel stigmatized by being in debt,” Baker said. “We do our coaching in a very nonjudgmental way – we don’t care how people got into the situation; Our concern is how can we support you to get out of this situation?”

The Family Services team works with a wide variety of clients, including some who are earning six figures but are at risk of losing their homes due to debt.

“People look around Lower Mainland and see nice houses and people driving fancy cars. Or you’re on social media and people are sharing their new purchases and things like that. There’s a perception that everyone else is fine except me,” Baker said. “And sometimes you compare it to an illusion rather than a reality. You don’t know all these people who drive nice cars how much debt they have.”

For coaching appointments, contact Family Services of Greater Vancouver at moneynavigator@fsgv.ca or call 1-800-609-3202.

Follow Theresa McManus on Twitter @TheresaMcManus
Email tmcmanus@newwestrecord.ca

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